November 27, 2024 – In a letter addressed to shareholders of Berkshire Hathaway on the 25th of the month, 94-year-old Warren Buffett announced his decision to convert 1,600 Class A shares of the company into 2.4 million Class B shares. These newly acquired Class B shares will then be donated to four family charitable funds. Notably, Berkshire Hathaway’s Class A shares are among the most valuable in the world, with each share priced at $716,000.
As reported by Red Star News, Buffett delved into the specifics of his estate plans in the letter. He emphasized that the crux of his testamentary arrangements revolves around the belief that wealthy parents should leave their children an appropriate amount of money – enough to pursue their passions, but not enough to sustain a life of idleness. Buffett also reiterated his commitment to a 2006 promise, stating that he intends to donate his entire stake in Berkshire Hathaway to the family’s charitable funds. According to Buffett, his holdings in Berkshire account for 99.5% of his personal wealth, meaning that only 0.5% will be directly inherited by his three children. Forbes estimates Buffett’s personal wealth to be approximately $150 billion.
In the opening lines of the letter, Buffett reflected on the certainty and uncertainty of death, writing, “Death always comes, bringing with it an awareness of life’s fragility and cruelty. Sometimes it visits the newborn babe, and sometimes it tarries for a century. I have been fortunate in my years, but the cost is that my children’s time is now limited, at 71, 69, and 66.”
Regarding his grandchildren and future generations, Buffett expressed a sense of helplessness in making arrangements. “I have full confidence in my children, but who can guarantee the character and values of future generations will align with the charitable environment of that time? Instead of making arrangements now, it is better to trust that three rational minds will make prudent decisions,” he stated. Buffett added that while his children, Susie, Howard, and Peter, will lead the family’s charitable funds after his passing, they have secretly selected three younger successors as backups. “However, I want to clarify that Susie, Howard, and Peter will be the decision-makers of the family charitable funds until they make other arrangements,” he wrote.
In the letter, Buffett also shared that many of his wealthy friends have sought his advice on managing large charitable funds. He revealed a basic rule he has set: any changes to the funds must be signed by all three children simultaneously. Buffett believes this approach prevents selfish thoughts of misappropriating assets, as the other two children would likely disagree. Furthermore, his children grew up with uncles who share the same values, and their actions are also subject to the “oversight” of Buffett’s inner circle of friends.
